- The Washington Times - Wednesday, October 6, 2004

ASSOCIATED PRESS

A major rewrite of corporate tax law that would end a nasty trade dispute with Europe won approval yesterday from congressional negotiators after House Republicans beat back efforts to increase regulation of tobacco.

The measure would repeal a tax break for thousands of American exporters that has been ruled illegal by the World Trade Organization. As a replacement, the proposal offers more than $140 billion in tax breaks for a wide range of businesses, from multinational companies to bow-and-arrow makers.

Fishermen, farmers and taxpayers in seven states that do not have individual state income taxes would also benefit.

Supporters of the tax bill expressed hope that the full House and Senate would approve it before lawmakers’ scheduled adjournment at the end of the week until after the Nov. 2 election.

A House vote could come as early as today. The timing of the Senate action was in greater debate because negotiators’ action on tobacco displeased some senators.

The House-Senate conference committee approved a $10.1 billion buyout to provide tobacco farmers payments for selling back to the government the quotas they own, which govern how much tobacco can be grown each year.

Negotiators rejected a Senate plan that linked the buyout to allowing tobacco regulation by the Food and Drug Administration.

Supporters of that idea were upset House Republicans on the committee blocked efforts by Sens. Edward M. Kennedy, Massachusetts Democrat, and Tom Harkin, Iowa Democrat, to include the FDA regulation in the compromise bill.

“This bill would not have passed the United States Senate without the FDA provision in it. So what the conferees have done is remove the linchpin in the passage of this legislation in a complete sellout to the tobacco companies,” said Sen. John McCain, Arizona Republican.

Some senators have raised the possibility of stalling the tax legislation if the FDA regulation were removed. But Sen. Mike DeWine, Ohio Republican, said, “I’m not going to get into tactics.”

Republicans, counting on the election, say Democrats will not want to delay passage of legislation that offers buyouts that are popular in the tobacco-growing states in the South where Senate seats are at stake.

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